The Export Promotion Capital Goods (EPCG) Scheme is actually a trade promotion scheme. It is implemented by the government of India. The scheme allows import of capital goods duty-free. The condition is that the capital goods must be used for the purpose of export production in India. The scheme is open to all manufacturers and exporters, including small and medium enterprises (SMEs).
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Benefits of the EPCG Scheme
Duty-free import of capital goods
The scheme allows duty-free import of capital goods, such as machinery, equipment, and software, that are required for the production of goods for export.
Enhanced competitiveness
The scheme helps Indian exporters to improve their competitiveness in the world market by enabling them to import state-of-the-art capital goods at zero duty.
Increased exports
The scheme helps to increase India's exports by making it easier and more affordable for exporters to import the capital goods they need to produce high-quality goods for export.
Eligibility
To be eligible for the EPCG Scheme, an exporter must meet the following criteria:
- The exporter must be registered with the Directorate General of Foreign Trade (DGFT).
- The exporter must have a valid export obligation.
- The exporter must import capital goods that are required for the production of goods for export.
Application procedure
To apply for the EPCG Scheme, the exporter must submit an application to the DGFT along with the following documents:
- A copy of the export obligation
- A list of the capital goods to be imported
- A declaration that the capital goods will be used for the production of goods for export
Fulfillment of export obligation
The exporter must fulfill the export obligation within a period of six years from the date of issuance of the EPCG authorization. If the exporter fails to fulfill the export obligation, they will be required to pay customs duty on the imported capital goods, along with interest.
Conclusion
The EPCG Scheme is a beneficial scheme for Indian exporters who want to import state-of-the-art capital goods at zero duty. The scheme helps exporters to enhance their competitiveness in the global market and increase their exports.
